**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-Q**





x
            Quarterly
                Report pursuant to Section 13 or 15 (d) of the Securities Exchange
                Act of
                1934 for the quarterly period ended September 30,
                2007





o
            Transition
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934 for the transition period from _____ to
                _____





Commission
      file number: 000-30805





**WGNB
      CORP.**


(Exact
      name of registrant as specified in its charter)





Georgia
            
            58-1640130(State
                of Incorporation)
            
            (I.R.S.
                Employer Identification No.)





201
      Maple
      Street


P.O.
      Box
      280


Carrollton,
      Georgia 30112


(Address
      of principal executive offices)





(770)
      832-3557


(Registrant’s
      telephone number, including area code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes ý No  ̈





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one).


Large
                  Accelerated filer o
              Accelerated
                  filer  o
              Non-accelerated
                  filer  x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes  ̈ No ý





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date:




Class
            
            Outstanding
                at November 12, 2007Common
                Stock, $1.25 par value
            
            6,058,939








**WGNB
      CORP.**





**INDEX
      TO FORM 10-Q**





**Item
                Number**
              **in
                Form 10-Q**
            
            **Description**
            
            **Page****Part
                One**
            
            **Financial
                Information**Item
                1.
            
            Financial
                Statements
            
            1Consolidated
                Balance Sheets at September 30, 2007 and December 31, 2006
            
            2Consolidated
                Statements of Earnings for the Three Months Ended September 30, 2007
                and
                September 30, 2006
            
            3Consolidated
                Statements of Comprehensive Income for the Three Months Ended September
                30, 2007 and September 30, 2006
            
            4Consolidated
                Statements of Earnings for the Nine Months Ended September 30, 2007
                and
                September 30, 2006
            
            5Consolidated
                Statements of Comprehensive Income for the Nine Months Ended September
                30,
                2007 and September 30, 2006
            
            6Consolidated
                Statements of Cash Flows for the Nine Months Ended September 30,
                2007 and
                September 30, 2006
            
            7Notes
                to Consolidated Financial Statements
            
            9Item
                2.
            
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            14Item
                3.
            
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            23Item
                4.
            
            Controls
                and Procedures
            
            23**Part
                Two**
            
            **Other
                Information**Item
                1.
            
            Legal
                Proceedings
            
            23Item
                1A.
            
            Risk
                Factors
            
            23Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            23Item
                3.
            
            Defaults
                Upon Senior Securities
            
            24Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            24Item
                5.
            
            Other
                Information
            
            24Item
                6.
            
            Exhibits
            
            24Signatures
            
            26





**Part
      I – Financial
      Information**





**Item
      1.**   **Financial
      Statements**





The
      unaudited financial statements of WGNB Corp. (the “Company”) are set forth on
      the following pages. All adjustments have been made which, in the opinion of
      management, are necessary in order to make the financial statements not
      misleading.


1


**WGNB
      CORP.**


**Consolidated
      Balance Sheets**


**As
      of September 30, 2007 and December 31, 2006**




September 30, 2007
            
            December 31, 2006(unaudited)
            
            (audited)AssetsCash
                and due from banks
            
            $
            29,575,678
            
            
            12,579,309Interest-bearing
                deposits in other banks
            
            
            3,584,287
            
            
            654,139Federal
                funds sold
            
            
            226,000
            
            
            -Cash
                and cash equivalents
            
            
            33,385,965
            
            
            13,233,448Securities
                available for sale
            
            
            95,042,170
            
            
            64,251,234Securities
                held to maturity, estimated fair valuesof
                $7,510,451 and $7,837,389
            
            
            7,510,451
            
            
            7,837,389Loans,
                net
            
            
            651,013,980
            
            
            467,752,885Premises
                and equipment, net
            
            
            17,361,093
            
            
            8,989,589Accrued
                interest receivable
            
            
            6,072,903
            
            
            3,772,818Cash
                surrender value of life insurance
            
            
            3,601,503
            
            
            293,100Goodwill
                and other intangibles, net
            
            
            29,659,726
            
            
            -Foreclosed
                property
            
            
            5,913,140
            
            
            566,935Other
                assets
            
            
            11,335,145
            
            
            8,631,193$
            860,896,076
            
            
            575,328,591Liabilities
                and Stockholders’ EquityDeposits:Demand
            
            $
            72,073,839
            
            
            52,681,900Interest
                bearing demand
            
            
            199,531,200
            
            
            149,765,104Savings
            
            
            19,161,766
            
            
            10,966,576Time
            
            
            171,871,231
            
            
            103,999,579Time,
                over $100,000
            
            
            232,748,003
            
            
            145,400,277Total
                deposits
            
            
            695,386,039
            
            
            462,813,436Federal
                Home Loan Bank advances
            
            
            54,500,000
            
            
            52,000,000Junior
                subordinated debentures
            
            
            10,825,000
            
            
            -Federal
                funds purchased
            
            
            3,276,000
            
            
            2,475,000Accrued
                interest payable
            
            
            3,666,602
            
            
            2,881,943Other
                liabilities
            
            
            8,652,834
            
            
            2,661,718Total
                liabilities
            
            
            776,306,475
            
            
            522,832,097CommitmentsStockholders’
                equity:Common
                stock, $1.25 par value, 10,000,000 shares authorized;6,058,939
                and 5,000,613 shares issued and outstanding
            
            
            7,573,674
            
            
            6,250,766Additional
                paid-in capital
            
            
            30,181,371
            
            
            2,662,306Retained
                earnings
            
            
            46,588,792
            
            
            43,513,370Accumulated
                other comprehensive income
            
            
            245,764
            
            
            70,052Total
                stockholders’ equity
            
            
            84,589,601
            
            
            52,496,494$
            860,896,076
            
            
            575,328,591




*See
      accompanying notes to unaudited consolidated financial
      statements.*


2


**WGNB
      CORP.**


**Consolidated
      Statements of Earnings**


**For
      the Three Months Ended September 30, 2007 and 2006**


**(unaudited)**




For the Three Months EndedSeptember 30, 2007
            
            September 30, 2006Interest
                income:Interest
                and fees on loans
            
            $
            14,613,982
            
            
            9,887,323Interest
                on federal funds sold
            
            
            207,931
            
            
            125,656Interest
                on investment securities:U.S.
                Government agencies
            
            
            613,815
            
            
            225,266State,
                county and municipal
            
            
            608,895
            
            
            360,231Other
            
            
            343,135
            
            
            314,978Total
                interest income
            
            
            16,387,758
            
            
            10,913,454Interest
                expense:Interest
                on deposits:Demand
            
            
            1,681,675
            
            
            1,208,915Savings
            
            
            76,252
            
            
            49,699Time
            
            
            5,219,570
            
            
            2,905,518Interest
                on FHLB and other borrowings
            
            
            864,461
            
            
            725,335Total
                interest expense
            
            
            7,841,958
            
            
            4,889,467Net
                interest income
            
            
            8,545,800
            
            
            6,023,987Provision
                for loan losses
            
            
            750,000
            
            
            375,000Net
                interest income after provision for loan losses
            
            
            7,795,800
            
            
            5,648,987Other
                income:Service
                charges on deposit accounts
            
            
            1,665,722
            
            
            1,027,830Mortgage
                origination fees
            
            
            79,234
            
            
            96,943Brokerage
                fees
            
            
            168,022
            
            
            55,759Gain
                on sale of small business loans
            
            
            -
            
            
            56,098Miscellaneous
            
            
            729,952
            
            
            381,159Total
                other income
            
            
            2,642,930
            
            
            1,617,789Other
                expenses:Salaries
                and employee benefits
            
            
            4,135,422
            
            
            2,573,262Occupancy
            
            
            988,382
            
            
            617,187Other
                operating
            
            
            1,870,285
            
            
            1,127,534Total
                other expenses
            
            
            6,994,089
            
            
            4,317,983Net
                earnings before income taxes
            
            
            3,444,641
            
            
            2,948,793Income
                taxes
            
            
            1,114,246
            
            
            852,473Net
                earnings
            
            $
            2,330,395
            
            
            2,096,320Basic
                earnings per share
            
            $
            0.38
            
            
            0.42Diluted
                earnings per share
            
            $
            0.38
            
            
            0.41Dividends
                declared per share
            
            $
            0.210
            
            
            0.183





*See
      accompanying notes to unaudited consolidated financial
      statements.*


3


**WGNB
      CORP.**


**Consolidated
      Statements of Comprehensive Income**





**For
      the Three Months Ended September 30, 2007 and 2006**


**(unaudited)**




For the Three Months EndedSeptember 30, 2007
            
            September 30, 2006Net
                earnings
            
            $
            2,330,395
            
            
            2,096,320Other
                comprehensive income, net of tax:Unrealized
                gains on investmentsecurities
                available for sale:Unrealized
                gains arising during the period
            
            
            850,995
            
            
            763,702Associated
                income taxes
            
            
            (289,338
            )
            
            (259,659
            )Other
                comprehensive income
            
            
            561,657
            
            
            504,043Comprehensive
                income
            
            $
            2,892,052
            
            
            2,600,363





*See
      accompanying notes to unaudited consolidated financial statements.*


4


**WGNB
      CORP.**


**Consolidated
      Statements of Earnings**


**For
      the Nine Months Ended September 30, 2007 and 2006**


**(unaudited)**





For the Nine Months EndedSeptember 30, 2007
            
            September 30, 2006Interest
                income:Interest
                and fees on loans
            
            $
            36,740,641
            
            
            27,449,479Interest
                on federal funds sold
            
            
            374,215
            
            
            382,150Interest
                on investment securities:U.S.
                Government agencies
            
            
            1,156,095
            
            
            771,138State,
                county and municipal
            
            
            1,327,564
            
            
            1,090,306Other
            
            
            1,005,067
            
            
            911,231Total
                interest income
            
            
            40,603,582
            
            
            30,604,304Interest
                expense:Interest
                on deposits:Demand
            
            
            4,490,782
            
            
            3,619,841Savings
            
            
            174,848
            
            
            136,864Time
            
            
            12,177,935
            
            
            7,570,381Interest
                on FHLB and other borrowings
            
            
            2,343,466
            
            
            2,038,018Total
                interest expense
            
            
            19,187,031
            
            
            13,365,104Net
                interest income
            
            
            21,416,551
            
            
            17,239,200Provision
                for loan losses
            
            
            1,500,000
            
            
            1,090,000Net
                interest income after provision for loan losses
            
            
            19,916,551
            
            
            16,149,200Other
                income:Service
                charges on deposit accounts
            
            
            3,631,170
            
            
            3,041,602Mortgage
                origination fees
            
            
            278,278
            
            
            277,388Brokerage
                fees
            
            
            468,628
            
            
            55,759Gain
                on sale of small business loans
            
            
            -
            
            
            84,223Miscellaneous
            
            
            1,797,702
            
            
            1,090,611Total
                other income
            
            
            6,175,778
            
            
            4,549,583Other
                expenses:Salaries
                and employee benefits
            
            
            9,944,918
            
            
            7,361,059Occupancy
            
            
            2,294,475
            
            
            1,783,903Other
                operating
            
            
            4,170,066
            
            
            3,114,102Total
                other expenses
            
            
            16,409,459
            
            
            12,259,064Net
                earnings before income taxes
            
            
            9,682,870
            
            
            8,439,719Income
                taxes
            
            
            3,118,436
            
            
            2,537,106Net
                earnings
            
            $
            6,564,434
            
            
            5,902,613Basic
                earnings per share
            
            $
            1.23
            
            
            1.18Diluted
                earnings per share
            
            $
            1.22
            
            
            1.17Dividends
                declared per share
            
            $
            0.61
            
            
            0.53





*See
      accompanying notes to unaudited consolidated financial
      statements.*


5


**WGNB
      CORP.**


**Consolidated
      Statements of Comprehensive Income**





**For
      the Nine Months Ended September 30, 2007 and 2006**


**(unaudited)**




For the Nine Months EndedSeptember 30, 2007
            
            September 30, 2006Net
                earnings
            
            $
            6,564,434
            
            
            5,902,613Other
                comprehensive income, net of tax:Unrealized
                gains on investmentsecurities
                available for sale:Unrealized
                gains arising during the period
            
            
            266,230
            
            
            58,353Associated
                income taxes
            
            
            (90,518
            )
            
            (19,840
            )Other
                comprehensive income
            
            
            175,712
            
            
            38,513Comprehensive
                income
            
            $
            6,740,146
            
            
            5,941,126





*See
      accompanying notes to unaudited consolidated financial
      statements.*


6


**WGNB
      CORP.**


**Consolidated
      Statements of Cash Flows**


**For
      the Nine Months Ended September 30, 2007 and 2006**


**(unaudited)**





For the Nine Months EndedSeptember 30, 2007
            
            September 30, 2006Cash
                flows from operating activities:Net
                earnings
            
            $
            6,564,434
            
            $
            5,902,613Adjustments
                to reconcile net earnings to net cashprovided
                by operating activities:Depreciation,
                amortization and accretion
            
            
            971,605
            
            
            800,525Provision
                for loan losses
            
            
            1,500,000
            
            
            1,090,000Stock-based
                employee compensation expense
            
            
            131,000
            
            
            96,000Income
                from bank owned life insurance
            
            
            (40,215
            )
            
            -(Gain)
                loss on sale of other real estate
            
            
            12,756
            
            
            (10,884
            )(Gain)
                loss on sale of premises and equipment
            
            
            (21,404
            )
            
            4,327Change
                in:Other
                assets
            
            
            (2,161,502
            )
            
            (2,495,106
            )Other
                liabilities
            
            
            376,972
            
            
            1,163,693Net
                cash provided by operating activities
            
            
            7,333,646
            
            
            6,551,168Cash
                flows from investing activities, net of effects of purchase accounting
                adjustments:Proceeds
                from maturities of securities available for sale
            
            
            49,894,157
            
            
            19,044,591Proceeds
                from maturities of securities held to maturity
            
            
            1,327,679
            
            
            262,672Proceeds
                for sale of securities available for sale
            
            
            5,993,155
            
            
            -Purchases
                of securities available for sale
            
            
            (43,950,507
            )
            
            (8,443,949
            )Purchases
                of securities held to maturity
            
            
            (1,000,000
            )
            
            (1,503,750
            )Net
                change in loans to customers
            
            
            (53,343,028
            )
            
            (25,701,528
            )Cash
                paid to First Haralson, net of cash received of$17,437,208
            
            
            (517,028
            )
            
            -Proceeds
                from sale of premises and equipment
            
            
            21,404
            
            
            -Purchases
                of premises and equipment
            
            
            (1,571,770
            )
            
            (834,785
            )Redeem
                cash surrender value asset
            
            
            293,101
            
            
            -Capital
                expenditures for other real estate
            
            
            (14,747
            )
            
            -Proceeds
                from sales of other real estate
            
            
            447,480
            
            
            619,177Net
                cash used by investing activities
            
            
            (42,420,104
            )
            
            (16,557,572
            )Cash
                flows from financing activities, net of effects of purchase accounting
                adjustments:Net
                change in deposits
            
            
            51,729,961
            
            
            21,479,353Proceeds
                from Federal Home Loan Bank advances
            
            
            10,000,000
            
            
            10,000,000Repayment
                of Federal Home Loan Bank advances
            
            
            (15,000,000
            )
            
            -Proceeds
                from junior subordinated debentures
            
            
            10,825,000
            
            
            -Net
                proceeds from federal funds purchased
            
            
            801,000
            
            
            -Dividends
                paid
            
            
            (3,075,149
            )
            
            (2,551,049
            )Proceeds
                from exercise of stock options
            
            
            61,319
            
            
            49,642Stock
                issuance cost
            
            
            (103,156
            )
            
            -Retirement
                of common stock
            
            
            -
            
            
            (303,043
            )Net
                cash provided by financing activities
            
            
            55,238,975
            
            
            28,674,903Change
                in cash and cash equivalents
            
            
            20,152,517
            
            
            18,668,499Cash
                and cash equivalents at beginning of period
            
            
            13,233,448
            
            
            16,221,889Cash
                and cash equivalents at end of period
            
            $
            33,385,965
            
            $
            34,890,388





*See
      accompanying notes to unaudited consolidated financial
      statements.*


7


**WGNB
      CORP.**


**Consolidated
      Statements of Cash Flows, continued**





**For
      the Nine Months Ended September 30, 2007 and 2006**


**(unaudited)**





For
                the Nine Months EndedSeptember 30, 2007
            
            September
                30, 2006Supplemental
                disclosure of cash flow information:Cash
                paid during the period for:Interest
            
            $
            17,029,000
            
            $
            12,961,642Income
                taxes
            
            
            3,358,000
            
            
            2,230,500Non-cash
                investing and financing activities:Transfer
                of loans to other real estate
            
            
            5,040,620
            
            
            -Change
                in unrealized gains onSecurities
                available for sale, net of tax
            
            
            175,712
            
            
            38,513Change
                in dividends payable
            
            
            413,863
            
            
            98,422




The
      non-cash investing activities associated with the acquisition of First Haralson
      are presented in Note 6 to the financial statements.





*See
      accompanying notes to unaudited consolidated financial
      statements.*


8





**WGNB
      Corp.**


**Notes
      to Consolidated Financial Statements**





**September
      30, 2007**


**(unaudited)**




**(1)
      Basis of Presentation**





The
      consolidated financial statements include the accounts of WGNB Corp. (the
“Company”) and its wholly-owned subsidiary, First National Bank of Georgia
      (f/k/a West Georgia National Bank) (the “Bank”). All significant inter-company
      accounts have been eliminated in consolidation. In some cases, certain prior
      period amounts have been reclassified to conform to current year
      presentation.





The
      accompanying unaudited interim consolidated financial statements reflect all
      adjustments which, in the opinion of management, are necessary to present fairly
      the Company’s financial position as of September 30, 2007, and the results of
      its operations and its cash flows for the three- and nine-month periods then
      ended. All such adjustments are normal and recurring in nature. The financial
      statements included herein should be read in conjunction with the consolidated
      financial statements and the related notes and the report of independent
      registered public accounting firm included in the Company’s Annual Report on
      Form 10-K for the year ended December 31, 2006, which included the results
      of
      operations for the years ended December 31, 2006, 2005 and 2004.





**(2)
      Net Earnings Per Share**





Basic
      earnings per share is based on the weighted average number of common shares
      outstanding during the period while the effects of potential common shares
      outstanding during the period are included in diluted earnings per share. The
      weighted average number of common shares outstanding and the potential common
      shares outstanding during the period included 1,055,149 shares issued to First
      Haralson shareholders in the merger which closed effective as of July 1, 2007.
      The average market price during the year is used to compute equivalent shares.





Reconciliation
      of the amounts used in the computation of both “basic earnings per share” and
“diluted earnings per share” for the periods ended September 30, 2007 and
      September 30, 2006 are as follows:





For the quarter ended September 30, 2007Net Earnings
            
            Common Shares
            
            Earningsper ShareBasic
                earnings per share
            
            $
            2,330,395
            
            
            6,058,939
            
            $
            0.38Effect
                of dilutive securities –
                Stock
                Options
            
            
            -
            
            
            18,329
            
            
            (0.00
            )Diluted
                earnings per share
            
            $
            2,330,395
            
            
            6,077,268
            
            $
            0.38




For the quarter ended September 30, 2006Net Earnings
            
            Common Shares
            
            Earningsper ShareBasic
                earnings per share
            
            $
            2,096,320
            
            
            5,000,219
            
            $
            0.42Effect
                of dilutive securities – Stock Options
            
            
            -
            
            
            56,644
            
            
            (0.01
            )Diluted
                earnings per share
            
            $
            2,096,320
            
            
            5,056,863
            
            $
            0.41


9




**WGNB
      Corp.**


**Notes
      to Consolidated Financial Statements**





**September
      30, 2007**


**(unaudited)**





**(2)
      Net Earnings Per Share - continued**




For
                the nine months ended September 30, 2007Net
                Earnings
            
            Common Shares
            
            Earningsper
                ShareBasic
                earnings per share
            
            $
            6,564,434
            
            
            5,358,546
            
            $
            1.23Effect
                of dilutive securities –
                Stock
                Options
            
            
            -
            
            
            24,392
            
            
            (0.01
            )Diluted
                earnings per share
            
            $
            6,564,434
            
            
            5,382,938
            
            $
            1.22




For
                the nine months ended September 30, 2006Net
                Earnings
            
            Common Shares
            
            Earningsper
                ShareBasic
                earnings per share
            
            $
            5,902,613
            
            
            4,996,827
            
            $
            1.18Effect
                of dilutive securities – Stock Options
            
            
            -
            
            
            60,913
            
            
            (0.01
            )Diluted
                earnings per share
            
            $
            5,902,613
            
            
            5,057,740
            
            $
            1.17




**(3)
      Stock Compensation Plans**





SFAS
      No.
      123 (revised 2004) (SFAS No. 123 (R)) “Share-Based Payment” was adopted by the
      Company on the required date, January 1, 2006, using the modified prospective
      transition method provided for under the standard. SFAS No. 123 (R) addresses
      the accounting for share-based payment transactions in which the Company
      receives employee services in exchange for equity instruments of the Company.
      SFAS No. 123 (R) requires the Company to recognize as compensation expense
      the
“grant date fair value” of stock options granted to employees in the statement
      of earnings using the fair-value-based method.




The
      Company recognized $46,500 and $32,250 of stock-based employee compensation
      expense during the three-months ended September 30, 2007 and 2006, respectively,
      and $131,000 and $96,000 of stock based compensation during the nine-months
      ended September 30, 2007 and 2006, respectively, associated with its stock
      option grants. The Company is recognizing the compensation expense for stock
      option grants with graded vesting schedules on a straight-line basis over the
      requisite service period of the award as permitted by SFAS No. 123 (R). As
      of
      September 30, 2007, there was $464,151 of unrecognized compensation cost related
      to stock option grants. The cost is expected to be recognized over the vesting
      period of approximately five years.





The
      grant-date fair value of each option granted during 2007 and 2006 was $6.39
      and
      $4.47, respectively. The Company did not grant any options during the second
      or
      third quarters of 2007 or 2006. The fair value of each option is estimated
      on
      the date of grant using the Black-Scholes Model. The following weighted average
      assumptions were used for grants in 2007 and 2006:





2007
            
            2006Dividend
                yield
            
            
            2.72
            %
            
            2.85
            %Expected
                volatility
            
            
            20
            %
            
            13
            %Risk-free
                interest rate
            
            
            4.83
            %
            
            4.54
            %Expected
                term
            
            
            6.6
                years
            
            
            10
                years


10





**WGNB
      Corp.**


**Notes
      to Consolidated Financial Statements**





**September
      30, 2007**


**(unaudited)**





**(4** **)
      Commitments and Contingencies**





**Derivative
      Instruments and Hedging Activities**





The
      Company entered into a series of interest rate swap agreements in the total
      notional amount of $41,156,509 on September 19, 2006 related to its issuance
      of
      brokered certificates of deposit. The interest rate swap contracts have various
      notional amounts, maturity dates, receive fixed rates and pay floating rates
      stated in terms of basis points plus or minus 1 Month LIBOR as
      follows:





NotionalAmount
            
            Maturity
              Date
            
            Receive
              Fixed
                Rate
            
            Pay
                Floating
              1
                Month LIBOR
              +/(-)
                bp$
            4,056,033
            
            
            1/31/08
            
            
            3.75
            %
            
            (137.65
            )3,000,000
            
            
            4/27/08
            
            
            4.15
            %
            
            (94.65
            )1,710,000
            
            
            6/30/08
            
            
            4.00
            %
            
            (105.65
            )2,945,000
            
            
            6/30/08
            
            
            4.10
            %
            
            (96.65
            )5,761,000
            
            
            6/30/08
            
            
            5.44
            %
            
            35.351,500,000
            
            
            2/2/09
            
            
            3.90
            %
            
            (110.65
            )1,602,992
            
            
            6/17/09
            
            
            4.10
            %
            
            (89.65
            )2,942,847
            
            
            6/30/09
            
            
            4.20
            %
            
            (79.65
            )2,000,000
            
            
            6/30/09
            
            
            4.25
            %
            
            (74.65
            )2,357,702
            
            
            8/5/09
            
            
            4.36
            %
            
            (64.65
            )3,550,000
            
            
            2/1/10
            
            
            4.00
            %
            
            (98.65
            )2,986,006
            
            
            4/27/10
            
            
            4.50
            %
            
            (49.65
            )2,002,985
            
            
            6/17/10
            
            
            4.25
            %
            
            (73.65
            )1,984,944
            
            
            6/30/10
            
            
            4.45
            %
            
            (59.65
            )2,757,000
            
            
            8/5/10
            
            
            4.50
            %
            
            (49.65
            )$
            41,156,509





The
      1
      month LIBOR rate at the initiation of the contracts was 5.33%, but the pay
      floating rate changes each month on the monthly reset date of each contract
      at
      the spread indicated above which remains constant.  The 1
      month LIBOR rate of the contracts was 5.21% and the total notional amount of
      the
      contracts remained $41,156,509 as of September 30, 2007.





The
      objective of the swap agreements was to decrease the Company’s interest rate
      risk exposure. Being asset sensitive, the Company was (and remains) susceptible
      to interest rate risk in a downward rate environment. This was, in part,
      attributable to the fixed rate nature of our brokered certificates of deposit.
      The Company is using these swap agreements to convert the fixed rate brokered
      certificates of deposit into floating rate instruments. Consequently, the
      interest rate swap contracts allow the Company to hedge changes in the fair
      value of its brokered certificates of deposit that result from changes in
      benchmark interest rates. The benchmark interest rate is defined as the 1 month
      LIBOR. In order to achieve this hedge objective, the Company has agreed to
      pay a
      floating rate of interest in exchange for receiving a fixed rate of interest
      on
      hedge instruments that is equal to the fixed rate coupon on the certificates
      of
      deposit.





The
      Company uses the long haul method afforded under FAS 133 “Accounting for
      Derivative Instruments and Hedging Activities” to assess the effectiveness of
      its current hedging activity and accounted for the hedge instrument as a fair
      value hedge. The Company will assess the effectiveness of the hedge contracts
      by
      regressing the market price, including any premium paid, of the brokered
      certificates of deposit (the dependent variable) with the market price of
      interest rate swap (the independent variable) on a quarterly basis until all
      the
      contracts have matured. Each regression analysis will include in its data set
      values from a retrospective (realized historical prices) and prospective
      (shocked scenario analysis) basis. The hedge will be considered highly effective
      if the correlation coefficient is within the “80-120” rule, where the R square
      is highly correlative to the value of 1 and the F-stat is large signifying
      high
      explanatory power.


11




**WGNB
      Corp.**


**Notes
      to Consolidated Financial Statements**





**September
      30, 2007**


**(unaudited)**





The
      Company has designated these swap contracts as a fair value hedge and,
      accordingly, records the fair value of the derivative as well as the fair value
      of the item being hedged on its balance sheet. Changes in the fair value of
      the
      swap contracts and the item being hedged are recorded in current period
      earnings.





**(5)
      Contingent Liabilities**





Various
      legal actions and proceedings are pending or are threatened against the Company
      and its subsidiaries, some of which seek relief or damages in amounts that
      are
      substantial. These actions and proceedings arise in the ordinary course of
      the
      Company’s business. After consultation with legal counsel, management believes
      that the aggregate liability, if any, resulting from such pending and threatened
      actions and proceedings will not have a material adverse effect on the Company’s
      financial condition.





**(6)
      Material Business Combination**





On
      January 22, 2007, WGNB Corp. entered into an agreement and plan of
      reorganization by and among WGNB Corp., West Georgia National Bank, First
      Haralson Corporation, and First National Bank of Georgia whereby First Haralson
      Corporation will be merged with and into WGNB Corp. by acquisition of 100
      percent of the outstanding common shares of First Haralson Corporation and,
      concurrently, First National Bank of Georgia will be merged into West Georgia
      National Bank. Upon the closing of the transaction, West Georgia National Bank
      changed its name to First National Bank of Georgia. The transaction was approved
      by both companies’ shareholders and it closed on June 29, 2007 with an effective
      date of July 1, 2007. First
      Haralson Corporation was headquartered in Buchanan, Georgia and operated five
      branches in Haralson County and two branches in Carroll County. The results
      of
      operations from the acquisition have been included in the Company’s consolidated
      financial statements from the date of acquisition, July 1, 2007.




Under
      the
      terms of the merger agreement, First Haralson Corporation’s shareholders elected
      to receive cash, WGNB Corp. common stock, or a combination of the two. The
      shareholders made their elections and, in the aggregate, chose: cash
      consideration in the amount of $16,315,423; shares of WGNB Corp. stock in the
      amount of 1,055,149 valued at $27.25 per share; which, together with total
      acquisition costs of $1,638,813, resulted in a total consideration of
      $46,707,046 at the date of the closing. In addition, the terms of the merger
      agreement allowed First Haralson Corporation to pay a one-time, special dividend
      not to exceed $7,250,000 in the aggregate, or approximately $35.67 per share,
      for each First Haralson Corporation share to First Haralson Corporation
      shareholders prior to the closing of the transaction.





One
      of
      the primary business objectives for the transaction was to strengthen the
      Company’s presence along the Interstate 20 corridor. The combined entity has
      retained the number one market share ranking in both Carroll and Haralson
      counties. Additionally, the transaction has enhanced the Company’s core deposits
      and has diversified its loan portfolio. The combination also created a top
      20
      financial institution in Georgia in terms of total deposits.





The
      following table summarizes the estimated fair values of assets acquired and
      liabilities assumed on the closing date, July 1, 2007. The purchase price
      allocation related to premises and equipment is preliminary and subject to
      adjustment pending our receipt of asset appraisals. The Company has arranged
      to
      obtain the appraisals and finalize the allocation by the fourth quarter of
      2007.


12





**WGNB
      Corp.**


**Notes
      to Consolidated Financial Statements**





**September
      30, 2007**


**(unaudited)**





**(6)
      Material Business Combination, continued**





(In
                thousands)
            
            First
              Haralson
              CorporationAssets
                acquired:Cash
                and cash equivalents
            
            $
            8,196Federal
                Funds sold
            
            
            9,241Securities
                available for sale
            
            
            42,282Loans,
                net
            
            
            136,459Premises
                and equipment
            
            
            7,807Core
                deposit intangible
            
            
            5,738Goodwill
            
            
            24,065Other
                assets
            
            
            7,247Total
                assets acquired
            
            
            241,035Liabilities
                assumed:Deposits
            
            
            180,843Other
                borrowed funds
            
            
            7,500Other
                liabilities
            
            
            5,985Total
                liabilities assumed
            
            
            194,328Net
                assets acquired
            
            $
            46,707




The
      financial information below presents the proforma earnings of WGNB Corp.
      assuming the operations of First Haralson Corporation were included in
      consolidated earnings as of the beginning of the earliest reporting
      period:




Three Months EndedSeptember 30,
            
            Nine Months EndedSeptember 30,(In
                  thousands)
            
            2007
            
            2006
            
            2007
            
            2006Total revenue
            
            $
            19,031
            
            
            16,551
            
            
            61,516
            
            
            46,622Net
                income
            
            
            2,330
            
            
            2,752
            
            
            7,522
            
            
            7,684Diluted
                earnings per share
            
            $
            0.38
            
            
            0.45
            
            
            1.23
            
            
            1.26





**(7)
      Recent Accounting Pronouncements**




**The
      Fair Value Option for Financial Assets and Financial
      Liabilities** ****




In
      February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
      No.
      159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* .
       SFAS No. 159 permits entities to choose to measure many financial
      instruments and certain other items at fair value.  The objective is to
      improve financial reporting by providing entities with the opportunity to
      mitigate volatility in reported earnings caused by measuring related assets
      and
      liabilities differently without having to apply complex hedge accounting
      provisions.  The statement is expected to expand the use of fair value
      measurement, which is consistent with FASB's long-term measurement objectives
      for accounting for financial instruments.  The statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2007;
      however, it includes an early adoption provision allowing entities to adopt
      within 120 days of their most recent fiscal year-end.  The Company does not
      intend to implement the provisions of SFAS No. 159 upon the adoption
      date.


13


**Item
      2.**  **Management’s Discussion and Analysis of Results of Operations and Financial
      Condition**





The
      following analysis compares WGNB Corp.’s results of operations for the quarter
      and nine month periods ended September 30, 2007 and 2006 and reviews the
      important factors affecting WGNB Corp.’s financial condition at September 30,
      2007 compared to December 31, 2006. These comments should be read in conjunction
      with the Company’s consolidated financial statements and the accompanying notes
      appearing elsewhere in this Report.





**Cautionary
      Notice Regarding Forward-Looking Statements**





Certain
      of the statements made in this Report and in documents incorporated by reference
      herein, including matters discussed under the caption “Management’s Discussion
      and Analysis of Financial Condition and Results of Operations,” as well as oral
      statements made by WGNB Corp. (the “Company”) or its officers, directors or
      employees, may constitute forward-looking statements within the meaning of
      Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”). Such forward-looking statements are based on management’s beliefs,
      current expectations, estimates and projections about the financial services
      industry, the economy and about the Company and the Bank in general. The words
      “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” and
      similar expressions are intended to identify such forward-looking statements.
      Such forward-looking statements are not guarantees of future performance and
      are
      subject to risks, uncertainties and other factors that may cause the actual
      results, performance or achievements of the Company to differ materially from
      historical results or from any results expressed or implied by such
      forward-looking statements. The Company cautions readers that the following
      important factors, among others, could cause the Company’s actual results to
      differ materially from the forward-looking statements contained in this Report:





·  the
      effect of changes in laws and regulations, including federal and state banking
      laws and regulations, with which the Company or the Bank must comply, and the
      associated costs of compliance with such laws and regulations either currently
      or in the future as applicable;





·  the
      effect of changes in accounting policies, standards, guidelines or principles,
      as may be adopted by the regulatory agencies as well as by the Financial
      Accounting Standards Board;





·  the
      effect of changes in the Company’s organization, compensation and benefit plans;





·  the
      effect on the Company’s competitive position within its market area of the
      increasing consolidation within the banking and financial services industries,
      including the increased competition from larger regional and out-of-state
      banking organizations as well as non-bank providers of various financial
      services;





·  the
      effect of changes in interest rates;





·  the
      effect of changes in the business cycle and downturns in local, regional or
      national economies;





·  the
      matters described under Part I, Item 1A, Risk Factors in the Company’s Annual
      Report on Form 10-K for the year ended December 31, 2006.





The
      Company cautions that the foregoing list of important factors is not exclusive.
      The Company undertakes no obligation to publicly update or revise any
      forward-looking statements.





**Critical
      Accounting Policies**





The
      Company has established various accounting policies which govern the application
      of accounting principles generally accepted in the United States in the
      preparation of its financial statements. These significant accounting policies
      are described in the notes to the consolidated financial statements filed with
      the Company’s Annual Report on Form 10-K for the year ended December 31, 2006
      (the “Notes”). Certain accounting policies involve significant judgments and
      assumptions by management which have a material impact on the carrying value
      of
      certain assets and liabilities; management considers these accounting policies
      to be critical accounting policies. The judgments and assumptions used by
      management are based on historical experience and other factors, which are
      believed to be reasonable under the circumstances. Because of the nature of
      the
      judgments and assumptions made by management, actual results could differ from
      these judgments and estimates which could have a material impact on the carrying
      value of assets and liabilities and the results of operations of the Company.
      All accounting policies are important, and all policies described in Notes
      should be reviewed for a greater understanding of how the Company’s financial
      performance is recorded and reported.


14




The
      Company believes the allowance for loan losses is a critical accounting policy
      that requires the most significant judgments and estimates used in the
      preparation of the Company’s consolidated financial statements. The allowance
      for loan losses represents management’s estimate of probable loan losses
      inherent in the loan portfolio. Calculation of the allowance for loan losses
      is
      a critical accounting estimate due to the significant judgment, assumptions
      and
      estimates related to the amount and timing of estimated losses, consideration
      of
      current and historical trends and the amount and timing of cash flows related
      to
      impaired loans. Please refer to the section of the Company’s Annual Report on
      10-K for the year ended December 31, 2006 entitled “Balance Sheet Overview – Provision
      and
      Allowance for Possible Loan and Lease Losses” and Note 1 and Note 3 to the Notes
      for a detailed description of the Company’s estimation processes and methodology
      related to the allowance for loan losses.





**Overview
      of Merger**





The
      Company merged with First Haralson Corporation (“First Haralson”) and its wholly
      owned subsidiary, First National Bank of Georgia, effective July 1, 2007. *See* Note 6
      of the accompanying notes to financial statements and the Company’s Current
      Report on Form 8-K filed July 9, 2007. In connection with the closing of this
      transaction, as of July 2, 2007 the Company issued 1,055,149 shares of common
      stock valued at $27.25 per share to the shareholders of First Haralson. In
      addition, the Company paid cash in the amount of $16,315,423. West Georgia
      National Bank (the wholly owned subsidiary of WGNB Corp) acquired the assets
      and
      liabilities of First National Bank of Georgia and, in connection with the
      combination of this financial institution, changed its name to First National
      Bank of Georgia. WGNB Corp. continues to be a one bank holding company which
      now
      owns an $861 million asset institution, First National Bank of
      Georgia.





The
      total
      fair market value of assets acquired from First Haralson in the merger totaled
      $241 million, which included $17 million in cash, $42 million in available
      for
      sale securities, $136 million in net loans, $8 million in property and equipment
      and $7 million in other assets (including the cash surrender value of bank
      owned
      life insurance of $3.6 million). The Bank also assumed $194 million of
      liabilities, including $181 million of deposits, $7.5 million of Federal Home
      Loan Bank borrowings and other liabilities of $6.0 million. The Bank recorded
      intangible assets (after making fair market value adjustments for First
      Haralson’s assets and liabilities) for goodwill in the amount of $24 million and
      a core deposit premium of $5.7 million.





During
      the third quarter, the Company incurred $1.6 million in transaction costs for
      legal fees, investment banker fees, executive contract buyouts and conversion
      of
      data processing systems that were includable in goodwill. Additionally, the
      Company incurred $533 thousand of non-recurring merger expenditures related
      to
      early retirement of employees and changes in branding, advertising, letterhead
      and other supplies. As more fully discussed below, the non-recurring
      expenditures have been excluded from net earnings for comparison purposes since
      they are merger related and not considered to be ongoing in nature. The above
      costs and expenditures were expected when evaluating whether to proceed with
      the
      merger with First Haralson.





**Results
      of Operations**





**Overview**





Net
      earnings for the nine months ended September 30, 2007 were $6.56 million, an
      increase of $662 thousand, or 11.2 percent, compared to the nine months ended
      September 30, 2006. The net earnings per diluted common share for the nine
      months ended September 30, 2007 was $1.22, which was $0.05, or 4.3 percent,
      greater than the same period in 2006. A comparison of earnings net of
      non-recurring merger related expenditures for the periods ending September
      30,
      2007 and 2006 is important to understanding the effect of the combination on
      the
      core earnings of the Bank. Net earnings excluding non-recurring merger related
      expenditures of $533 thousand, net of resulting tax benefit for the nine months
      ended were $6.89 million, or $1.28 per diluted share. This compares to $5.90
      million, or $1.17 per diluted share, of net earnings for the nine months ended
      September 30, 2006, an increase of $987 thousand, or $0.11 per share. On a
      percentage basis, net earnings exclusive of merger costs increased 16.8 percent
      and net earnings per diluted share increased by 9.4 percent.





Net
      earnings for the third quarter ended September 30, 2006 were $2.33 million
      compared to $2.10 million for the third quarter of 2006, an increase of 11.2
      percent. On a diluted earnings per share basis, net earnings were $0.38 in
      the
      third quarter of 2007 compared to $0.42 per share in 2006, a decrease of 9.5
      percent. Net earnings exclusive of non-recurring merger related expenditures,
      however, were $2.64 million, or $0.43 per share, an increase of 25.7 percent
      (or
      2.4 percent on a diluted per share basis) over net earnings for the third
      quarter of 2006.


15





The
      largest development affecting the Bank’s earnings and future outlook apart from
      the merger of First Haralson is the rapid increase in non-performing assets
      which took place in the third quarter of 2007. Management continually analyzes
      the strength of its loan portfolio, particularly its real estate development
      and
      residential construction loan portfolio which comprises approximately 40 percent
      of the Bank’s overall loan portfolio. Despite aggressive loan management and
      workout efforts with its borrowers, management determined it to be necessary
      to
      enter the collection process on approximately $16.9 million in additional
      impaired loans in the third quarter of 2007. *See* -
      Provision and Allowance for Loan Losses ** and
      -
      Non-Performing Assets and Past Due Loans.





The
      sudden deterioration in the residential real estate market is impacting many
      southeastern financial institutions. As management gathers current appraisals
      on
      the properties securing the Company’s troubled loans, however, it is finding
      typically that property values, while reduced from their original appraisals,
      were nonetheless sufficient to enable the Company to limit necessary net
      charge-offs to $1.1 million, or 0.20 percent of average loans, through September
      30, 2007. The Company has not, to date, experienced fraud which has plagued
      a
      number of other financial institutions. The Bank, by policy, does not carry
      its
      foreclosed real property at greater than 85 percent of current appraisal. We
      believe that policy has been effective in the past and appears to be sufficient
      to permit us to account for selling costs and potential devaluation in the
      current residential real estate market. However, should there be continued
      deterioration in the real estate market, management may determine that further
      write-downs are necessary.





The
      Bank’s market area has not, to date, experienced the great appreciation in real
      estate values that many other areas of the southeast and nation have
      experienced. Consequently, while property values are down, they are not
      significantly down. Moreover, management is actively engaged in communications
      with key market participants such as independent real estate appraisers, agents
      and local developers and builders. Consequently, we believe the values we loan
      against are accurate based on our experience and sense of the market.
      Nonetheless, there is a greater degree of uncertainty in the current market
      and
      management will continue to attempt to reflect that uncertainty in its loan
      loss
      reserve determinations. For example, management felt it prudent to double its
      loan loss provision in the third quarter of 2007 from those carried in the
      first
      two quarters of 2007. Specifically, the Company recorded $375 thousand in loan
      loss provision in each of the first and second quarters of 2007 compared to
      $750
      thousand it recorded in the third quarter of 2007. Even with the impact of
      the
      merger costs, charged-off loans, increased provision, and increased
      non-performing assets, however, the net earnings increased on both a total
      and
      diluted earnings per share basis in the quarter and year-to-date periods ending
      September 30, 2007.





*Net
      Interest Income*





The
      Company’s net interest margin was expected to change as a result of the merger.
      Specifically, management expected that the Company’s average net interest margin
      would decline since First Haralson’s net interest margin was historically lower
      than the Company’s. First Haralson’s loan portfolio, despite having a lower
      yield, actually diversified the Company’s total portfolio to an overall lower
      risk profile. Also, the Company issued trust preferred securities to fund a
      portion of the cash payment to First Haralson shareholders and to further
      capitalize the Company. The new debt is also expected to decrease the net
      interest margin on a consolidated basis. Consequently, while the Company’s net
      interest margin was expected to decline as a result of the merger, its net
      interest income was expected to increase given the impact of the combined
      entities. Also related to the merger, the Company recorded a fair market value
      adjustment on the loan portfolio which resulted in a $1.2 million discount
      on
      the acquired portfolio that is amortizing over a 53 month period. In marking
      the
      acquired portfolio to market, the Company discounted the loans by the current
      rate market rate of loans being originated for each loan type. Overall, the
      net
      interest income of the combined entity (as discussed below) is expected to
      be
      accretive to the Company’s earnings.





The
      second major factor affecting the Company’s net interest margin was the impact
      of non-performing assets. As discussed above, the Company and the banking sector
      in general are experiencing a rapid deterioration in demand for real estate.
      The
      impact of this trend is typically negative on a bank’s net interest margin and
      net interest income. After a protracted period where there is low or no sales
      demand for real estate, certain borrowers eventually are unable to carry the
      interest and expense burden of a real estate development. When this occurs
      a
      loan becomes impaired, that is, some portion of the loan’s collectability comes
      into question. Management must then assess the net realizable value of the
      loan
      and determine whether to continue accruing interest on the loan based on its
      net
      realizable value.




At
      the
      time an impaired loan is placed into non-accrual status or management determines
      to foreclose on a property which collateralizes the loan, that asset is no
      longer classified as an “earning asset” (a loan) but, instead, is classified as
      a “non-earning asset” (an impaired loan or real estate owned depending on where
      the loan is in the collection process). In certain instances, management
      reverses accrued but uncollected interest income on such loans to the extent
      that the amount of interest was considered non-collectable. During the third
      quarter of 2007, management reversed interest income on impaired loans in the
      amount of $39 thousand. This reversal had a negative impact on net interest
      income for the period.


16





Additionally,
      non-earning assets remain on the balance sheet of the Company until sold and,
      therefore, must be funded with interest-bearing liabilities. This has the effect
      of further reducing the net interest margin and net interest income since the
      Company must continue to pay interest on the funding, but receives no interest
      from the asset in return. Most of the Company’s non-performing assets this year
      were placed into non-earning status late in the third quarter. Consequently,
      the
      impact to the net interest margin and net interest income was not significant
      as
      of the end of the third quarter of 2007. However, the impact is expected to
      be
      greater in the fourth quarter and in subsequent periods. Because of the
      continuing impact on earnings of non-earning assets, management must focus
      on
      remediating those assets as expeditiously as possible. Moreover, the more
      rapidly that those assets are converted to earning status, the more positively
      impacted will be the earnings of the Company.





The
      Company is slightly asset-sensitive. That is, as rates decline, the Bank’s net
      interest margin and net interest income decline. In mid-September, 2007, the
      Federal Reserve reduced the target federal funds rate by 50 basis points. Thus,
      management expects that reduced market rates will have a more negative impact
      in
      the fourth quarter of 2007 and beyond than it did in the third quarter of 2007.
      The Company’s net interest margin will eventually normalize when liabilities
      have had time to reprice. Management estimates that the net interest margin
      will
      rebound over a one year period as liability repricing converges with asset
      repricing.





In
      the
      past, management’s analysis of the net interest margin was focused primarily on
      the Bank’s net interest margin. Since the Company has now incurred the trust
      preferred debt, management must begin to focus on the consolidated net interest
      margin. The average consolidated net interest margin for the third quarter
      of
      2007 was 4.5 percent. This compares to 4.6 percent as of the second quarter
      of
      2007 and 4.8 percent as of the third quarter of 2006 on a consolidated basis.
      Stated in terms of total net interest income for the quarter, the third quarter
      consolidated net interest income was $8.5 million. This compares to $6.6 million
      for the second quarter of 2007 and $6.0 million for the third quarter of 2006.
      Despite a compressing net interest margin, net interest income increased by
      $1.9
      million, or 28.8 percent, when comparing the third quarter of 2007 with the
      second quarter of 2007. Comparing this quarter’s net interest income with the
      third quarter of 2006, the increase was $2.5 million, or 41.9
      percent.





The
      year-to-date average consolidated net interest margin through September 30,
      2007
      was 4.6 percent. The year-to- date average consolidated net interest margin
      through September 30, 2006 was 4.6 percent. As described above, the slight
      compression was due to the merger, the minimal impact of non-performing assets
      and the reduction in market interest rates. Management remains focused on
      reducing non-performing assets as those will likely affect forward
      earnings.





*Non-Interest
      Income*





Non-interest
      income for the first nine months of 2007 increased $1.6 million, or 35.3
      percent, when compared to the first nine months of 2006. Substantially all
      of
      the increase in non-interest income is due to the addition of First Haralson.
      As
      stated above, the merger closed as of July 1, 2007. Therefore, the results
      of
      operations for the third quarter of 2007 includes a full three months of
      operations of the combined entities. Comparing the third quarter of 2006 to
      the
      third quarter of 2007, service charges on deposit accounts increased $638
      thousand, or 62.1 percent. The increase in service charge income from the nine
      months ended September 30, 2006 to September 30, 2007 is $590 thousand, or
      19.4
      percent. Prior to the merger, First Haralson was averaging approximately $200
      thousand per month in service charges on deposit accounts. Consequently, almost
      all of the growth in service charge income for the year was attributable to
      the
      addition of First Haralson in the third quarter of 2007.





Mortgage
      origination fees through September 30, 2007 were $278 thousand, which
      represented an increase of $1 thousand when compared to the same period in
      2006.
      The Company’s mortgage origination volume consists primarily of new and resale
      home financing as mortgage interest rates remain historically low. While
      mortgage rates today have increased from their forty year lows, they continue
      to
      be favorable to home buyers. Prior to the merger, First Haralson did not
      participate in mortgage brokerage.





As
      described in previous filings, the Company began providing investment brokerage
      services in August 2006 and this business line has grown over the past year.
      First Haralson similarly provided investment brokerage services prior to the
      merger averaging approximately $12 thousand per month in investment brokerage
      fees. Through the first nine months of 2007, the Company generated $469 thousand
      of brokerage fees, an increase of $413 thousand, or 740 percent, when compared
      to the nine months ended September 30, 2006. Prior to the merger, the Company
      averaged $50 thousand per month in fee generation from its brokerage services
      and has reached a breakeven point with respect to this new business line in
      the
      time period originally anticipated by management.




The
        Company sold the guaranteed portion of two SBA loans in the nine months ended
        September 30, 2006, resulting in gains totaling $84 thousand. The Company
        has
        not generated or sold an SBA loan in 2007.


17




Miscellaneous
      income increased by $349 thousand, or 91.5 percent, when comparing the three
      months ended September, 2007 with that of 2006. First Haralson averaged
      approximately $100 thousand per month in other income prior to the merger.
      Consequently, most of the increase in miscellaneous income on a
      quarter-to-quarter basis was attributable to the merger. The increase in other
      miscellaneous income for year-to-date September, 2007 with that of 2006 was
      $707
      thousand, or 64.8 percent. Miscellaneous income includes revenue generated
      from
      automated teller machine and debit card usage, miscellaneous fee generation
      and
      other miscellaneous income, gains and losses. The increase in other non-interest
      income in comparing 2007 results from that of 2006 were attributable to, among
      others, increases in the market value of the Company’s interest rate swap
      agreements of $141 thousand, increases in automated teller machine and debit
      card revenue of the combined entities of $134 thousand and increases in loan
      late charges of $52 thousand. Also included in the third quarter 2007
      miscellaneous income is $40 thousand of income on the Company’s bank-owned
      insurance asset acquired in the acquisition.





*Non-Interest
      Expense*





Non-interest
      expense increased $4.2 million, or 33.9 percent, for the nine months ended
      September 30, 2007 compared to the same period in 2006. Non-interest expense
      increased $2.7 million, or 62.0 percent, when comparing the third quarter of
      2007 to the third quarter of 2006. Again, the increase on a quarterly and
      year-to-date basis is primarily due to the impact of the merger. Management
      will
      seek to gain operating efficiencies in the future as the entities continue
      to
      combine their deposit and loan operations. Additionally, as the combined
      companies experience employee turnover and retirement, disposal of excess real
      estate and expansion of its product suite to the adjacent Haralson County
      market, the combined entity should experience cost savings and revenue
      enhancement which should likewise have an accretive impact on the earnings
      of
      the Company.





The
      Company now operates fourteen full service branches and two motor branches
      in
      the west Georgia area having acquired five full service branches and one motor
      branch in the merger. The addition of employees and facilities has had a
      significant impact on salaries and employee benefits, occupancy expense and
      other operating expense of the Company. The Company acquired First Haralson’s
      recently constructed Bremen Financial Center and its Pacific Avenue branch,
      both
      of which are located in Bremen, Georgia within six miles of Interstate 20 and
      approximately 45 miles west of downtown Atlanta. It also acquired full service
      branches and a motor branch in Buchanan, Temple and Tallapoosa, Georgia, all
      of
      which are within 15 miles of Interstate 20. The Company now has at least one
      branch on every major exit west of Atlanta from Chapel Hill Road in Douglasville
      to the Alabama border.





Salaries
      and employee benefits expense accounted for $2.6 million, or 62.2 percent,
      of
      the year-to-date increase in non-interest expense. Comparing the third quarter
      of 2006 to the third quarter of 2007, salaries and employee benefits increased
      $1.6 million, or 60.7 percent. As previously discussed, the merger has had
      a
      significant impact on salaries and employee benefits expense. Management
      expected an increase in salaries and benefits of approximately $60 thousand
      per
      employee on an annual basis. The Company’s actual results through the end of
      September, 2007 are consistent with the original estimate. Included in the
      overall increase was $326 thousand representing payments made to employees
      who
      accepted early retirement offered in connection with the merger. Management
      anticipates that there will be others who accept the early retirement package
      offered to certain employees for the remainder of the year. However, we do
      not
      expect significant payment of retirement packages beyond 2007. Therefore, this
      portion of the increase in salaries and benefits expense is considered
      non-recurring.





The
      Company increased its full time equivalent employee count to 262 as of September
      30, 2007, including 87 full time equivalent employees that were retained in
      the
      merger. This compared to 170 full time equivalent employees as of September
      30,
      2006. The Company negotiated contract buyouts with three executives of First
      Haralson, the cost of which was included in goodwill in the combination.
      Additional retirement and turnover of employees since the merger has taken
      place. Management expects retirements and other normal turnover to continue
      to
      occur but does not anticipate that layoffs of employees will be necessary to
      achieve cost savings expected from the merger.





Occupancy
      expenses for year-to-date 2007 increased $511 thousand, or 28.6 percent, from
      the same period in 2006. The occupancy expense since the merger took place,
      comparing the third quarter results of 2007 with those of 2006, increased $371
      thousand, or 60.1 percent. The Company acquired fixed assets in 2007 exclusive
      of the merger and continues to experience increased occupancy expense because
      of
      its expansion strategy. However, occupancy expense increase for this period
      is
      almost exclusively attributable to expense from the acquired facilities.
      Management made an estimated market value adjustment to acquired real estate
      in
      the transaction of $1 million which is depreciating over the remaining useful
      life of the properties. The appraisals on the acquired properties will be
      completed in the fourth quarter of 2007. Real estate acquired from First
      Haralson included a vacant branch and an operations center which management
      intends to sell in the near future. Also included in the occupancy expense
      is
      $17 thousand of non-recurring expenditures related to necessary system upgrades
      to accommodate the merger.


18





Total
      other operating expenses for the nine months ended September 30, 2007 increased
      $1.1 million, or 33.9 percent, when compared to the same period of 2006.
      Comparing the third quarter of 2007 with the third quarter of 2006, total other
      operating expenses increase $743 thousand, or 65.9 percent. Again, most of
      the
      increase in other operating expenses is attributable to the merged entity.
      Included in the increase is $190 thousand of non-recurring merger related
      expenditures for branding and advertising the name change and updating supplies
      such as letterhead and internal documents. The Company recorded a core deposit
      premium in the amount of $5.7 million which it is amortizing over a ten year
      period in the amount of $47 thousand per month. Amortization of this core
      deposit premium in the amount of $143 thousand is included in other operating
      expense for the third quarter of 2007.





Management
      anticipates that operating efficiencies will be gained as the two entities
      functionally become one. The Company continues to incur increased professional
      fees related to its internal audit program in compliance with the Sarbanes
      -
      Oxley Act requirements. However, the cost of regulatory compliance will now
      be
      spread over a greater asset base. The acquired entity has assumed the Company’s
      internal control processes.





*Income
      Taxes*





Income
      tax expense for the nine months ended September 30, 2007 was $3.12 million
      on
      operating earnings compared to $2.54 million for the same period in 2006. The
      effective tax rate for the period ended September 30, 2007 was 32.2 percent
      on
      operating income compared to 30.1 percent for the same period in 2006. The
      increased effective rate is due to the reduced relative impact of investment
      in
      federal and state tax credits, the reduced relative impact of interest income
      on
      tax free securities and loans compared to total interest income and a higher
      corporate tax bracket.





*Provision
      and Allowance for Loan Losses*





The
      Company recognized net charge-offs on a portion of several impaired loans in
      the
      amount of $951 thousand in the third quarter of 2007. In analyzing the impaired
      and potentially impaired loans in past months, management recognized the need
      to
      assign specific reserves to the loans since the ultimate collectability would
      likely be dependent on the collateral securing the loans rather than the ability
      of the borrower to repay or the income on the property. Management obtained
      updated appraisals on the properties which collateralize the loans and
      determined the amount of charge-off that it believed was necessary. Management
      also identified additional potentially impaired loans as of September 30, 2007
      and determined the additional specific reserves and increased loan loss
      provision needed as a result. As stated earlier, management elected to increase
      its loan loss provision to $750 thousand in the third quarter of 2007 compared
      to $375 for each of the first and second quarters of 2007. Management intends
      to
      adequately provide for potential loan loss in the portfolio.





The
      relative suddenness with which the loan impairments arose was not fully
      anticipated. While the affected loans had previously been recognized as weak,
      the rapidness with which the overall residential real estate market deteriorated
      affected borrowers who were not typically past due. Many banks are currently
      trying to evaluate the ultimate impact of the sub-prime mortgage lending
      contagion on their loan portfolios. Management likewise continues to measure
      the
      impact of this unexpected phenomenon as time progresses. Having received new
      appraisals on several properties, management continues to assess whether the
      appraised values will be sustained or whether additional charge-offs will be
      necessary. Management’s policy is to charge-off loans to the extent that they
      exceed 85 percent of the updated appraisal. This allows for a 15 percent cushion
      to cover selling costs as well as further devaluation. The 85 percent valuation
      allowance has been effective in the past as the Company has not had significant
      gain or loss on its disposition of property in prior years.





The
      Company’s market area has not experienced the significant appreciation in real
      estate values that many of the areas in the southeast (including Atlanta) have
      experienced. The property that may ultimately result in foreclosed property
      owned by the Company is primarily made up of residential housing, residential
      housing developments and related commercial frontage lots. Economists estimate
      that there is an eighteen to twenty four month supply of homes and a thirty
      six
      to forty eight month supply of home building lots available in the market.
      The
      Company’s holding period for real estate is not typically that long.
      Consequently, management may elect to discount the property to reduce its
      holding period. Should this become necessary, the Company could experience
      further write-downs of properties. However, management has been in continued
      negotiations with borrowers and others as to certain of the properties as it
      attempts to collect on the loans and, thus far, the values appear to be
      appropriate.





The
      Company recorded $1.5 million in allowance for loan loss on its acquired loan
      portfolio in the First Haralson merger. This represented 1.1 percent of the
      acquired portfolio as of the date of closing of the merger. Management evaluated
      the potential risk in the portfolio and First Haralson’s assessment of the
      credit risk and historical loss to determine the proper allowance required
      on
      the acquired loan portfolio.


19





The
      Company experienced a higher than historic charge-off in 2006. As previously
      disclosed, in June of 2006, the Company charged-off a portion of an impaired
      loan in the amount of $887 thousand. The Company eventually foreclosed on the
      property which it currently owns. Management continues to evaluate its position
      with respect to this property and is in the process of obtaining an updated
      appraisal. Again, management carries its property at 85 percent of current
      appraisal. Accordingly, if the value of the property has decreased, there will
      be a further write down to the value of the property.





Management
      continually evaluates the adequacy of the allowance for loan losses which is
      determined based on its judgment concerning the amount of risk inherent in
      the
      Company’s loan portfolio. In making its informed judgment, management considers
      such factors as the change in levels of non-performing and past due loans,
      historical loan loss experience, borrowers’ financial condition, concentration
      of loans to specific borrowers and industries, estimated values of underlying
      collateral, and current and prospective economic conditions. The allowance
      for
      loan loss at September 30, 2007 was $7.7 million, or 1.2 percent of total loans,
      compared to $5.4 million, or 1.2 percent of total loans, at September 30, 2006.
      Once a loan becomes impaired and management makes its fair market value
      assessment, the charge-off is recorded and it is excluded from the allowance
      for
      loan loss calculation. Management believes that the current allowance for loan
      losses is adequate to absorb possible losses in the loan portfolio. Changes
      in
      the allowance for loan losses for the nine month period ended September 30,
      2007
      compared to September 30, 2006 are as follows:





**Allowance
      for Loan Loss**


******For the Nine Months Ended**
                **September 30,****2007**
              
              **2006**Balance
                  at beginning of period
              
              $
              5,748,355
              
              $
              5,327,406Addition
                  to allowance for loan loss attributable to acquired loan
                  portfolio
              
              
              1,527,225
              
              
              -Charge-offs:Commercial,
                  financial and agricultural
              
              
              75,058
              
              
              47,414Real
                  estate –
                  construction
              
              
              751,784
              
              
              -Real
                  estate – mortgage
              
              
              157,508
              
              
              909,758Consumer
                  loans
              
              
              162,537
              
              
              111,978Total
                  charge-offs
              
              
              1,146,887
              
              
              1,069,150Recoveries:Commercial,
                  financial and agricultural
              
              
              6,286
              
              
              8,959Real
                  estate – construction
              
              
              429
              
              
              -Real
                  estate – mortgage
              
              
              7,784
              
              
              -Consumer
                  loans
              
              
              56,104
              
              
              49,283Total
                  recoveries
              
              
              70,603
              
              
              58,242Net
                  charge-offs
              
              
              (1,076,284
              )
              
              (1,010,908
              )Provision
                  for loan losses
              
              
              1,500,000
              
              
              1,090,000Balance
                  at end of period
              
              $
              7,699,296
              
              $
              5,406,498Ratio
                  of net charge-offs during the period toaverage
                  loans outstanding
              
              
              0.19
              %
              
              0.23
              %Ratio
                  of allowance to total loans
              
              
              1.17
              %
              
              1.20
              %





*Non-Performing
      Assets and Past Due Loans* ******





Non-performing
      assets, comprised of real estate owned, non-accrual loans and loans for which
      payments are more than 90 days past due, totaled $23.5 million at September
      30,
      2007 compared to $3.8 million at September 30, 2006. Non-performing assets
      expressed as a percentage of total loans and real estate owned at September
      30,
      2007 and September 30, 2006 were 3.5 percent and 0.9 percent, respectively.
      Non-performing assets are largely made up of nine credit relationships of which
      $10.7 million are on non-accrual, $6.9 million are 90 days past due and still
      accruing and $5.9 million are foreclosed properties. The percentage of loans
      past due 30 days or greater has also increased. The percentage of loans 30
      days
      past due exclusive of non-accrual loans was 4.8 and 2.4 percent, respectively,
      for the periods ended September 30, 2007 and 2006.


20





Most
      borrowers have been cooperative with management thus far in this difficult
      collection process. Many of these borrowers are long-term customers of the
      Bank
      and/or have many years of experience in real estate development and investment.
      The reality is that these customers are partly dependent upon home and lot
      sales
      to service the debt and the rapid slowdown in the residential real estate market
      had a significant impact on their ability to perform as agreed. The borrowers
      are actively marketing the properties and are eager to continue in the real
      estate development business once the market stabilizes. Based on management’s
      past experience, cooperation between a willing borrower and management
      ultimately results in greater recovery of an impaired loan.





The
      Company did not participate in sub-prime lending. However, the additional supply
      of homes caused by foreclosure of sub-prime mortgages has increased the
      inventory of residential homes. Management will continue to make its assessment
      with regard to the market values and the ultimate collectability of loans.
      However, the uncertainty in the market makes it more difficult for management
      to
      make forward-looking judgments. The sub-prime loan contagion continues to unfold
      and may have an impact in the Company’s market and on the Company’s financial
      position.





**Financial
      Condition**





*Overview*





Total
      assets were $861 million at September 30, 2007, an increase of $286 million,
      or
      49.6 percent, from December 31, 2006. Total assets increased by $211.2 million
      (including $29.7 million of intangible assets) as a result of the merger with
      First Haralson. Consequently, the Company grew total assets organically by
      $45
      million, or 7.8 percent, for the nine months ended September 30, 2007. Comparing
      total assets from one year ago, the Company has grown organically by $60.5
      million, reflecting an annual percentage growth rate of 10.8
      percent.




*Assets
      and Funding*





At
      September 30 2007, earning assets totaled $771 million which represents an
      increase of $220.3 million, or 40.0 percent, since December 31, 2006. Without
      taking into account the loans, securities and other earning assets acquired
      in
      the merger, the Company grew its earning assets by $28.5 million, or 5.2
      percent. This growth percentage has, however, been impacted by the increase
      in
      non-performing assets. Total loans have grown by $47.1 million, or 9.9 percent,
      while federal funds, investment securities and other earning assets have
      decreased $18.6 million. Loans acquired in the First Haralson transaction
      totaled $139 million. The majority (95 percent) of those loans were 1-to-4
      family residential or consumer oriented loans.





Major
      classifications of loans at September 30, 2007 and December 31, 2006 are
      summarized as follows:





**Loan**
            
            **At September 30, 2007**
            
            
            **December 31, 2006**Commercial,
                financial and agricultural
            
            $
            52,778,195
            
            
            
            52,333,704Real
                Estate –
                mortgage
            
            
            326,367,860
            
            
            
            219,563,340Real
                Estate – construction
            
            
            239,735,750
            
            
            
            175,024,051Consumer
            
            
            41,752,289
            
            
            
            27,397,551**Total**
            
            **$**
            **660,634,094**
            
            
            
            **474,318,646**Unearned
                loan fees and discounts
            
            
            (1,920,818
            )
            
            
            (817,406
            )Allowance
                for loan losses
            
            
            (7,699,296
            )
            
            
            (5,748,355
            )**Net
                Loans**
            
            **$**
            **651,013,980**
            
            
            
            **467,752,885**





Through
      September 30, 2007, interest-bearing liabilities have increased $216.5 million,
      or 46.6 percent, compared to those at December 31, 2006. The Company acquired
      $167.0 million in interest-bearing liabilities in the First Haralson merger.
      In
      contrast, year-to-date the Company has grown interest-bearing liabilities
      organically by $49.5 million, or 10.7 percent, which is substantially identical
      to the organic loan growth the Company experienced in the nine months ended
      September 30, 2006.





Non-interest-bearing
      demand deposits increased $19.4 million, or 36.8 percent, for the nine months
      ended September 30, 2007. However, the Company acquired $21.3 million of
      non-interest-bearing demand deposits in the merger. Consequently, the Company
      actually experienced a reduction in non-interest-bearing demand deposits of
      $1.9
      million since December 31, 2006. During the nine month period ended September
      30, 2007, interest-bearing demand deposits increased $49.8 million, or 33.2
      percent, which has been almost entirely attributable to the merger ($45.4
      million). In the same nine month period in 2007, time deposits increased $155.2
      million, or 62.2 percent, with $95.9 million assumed in the merger. As of
      December 31, 2006, transaction and savings accounts constituted 46.1 percent
      and
      time deposits accounted for 53.9 percent of total deposits. Those same
      percentages as of September 30, 2007 were 41.8 percent for transaction and
      savings accounts and 58.2 percent for time deposits. This is one of the factors
      affecting the Company’s cost of funds since time deposits carry a higher
      interest cost than transaction accounts.


21





Loan
      growth has been primarily funded by deposit growth. As of September 30, 2007,
      the Company had a small amount of liquidity on its balance sheet to fund future
      loan growth. The Company has a pipeline of loans that should utilize the
      available liquidity by the end of 2007. The Company uses brokered deposits
      more
      frequently than in the past since they can be acquired at a reduced cost and
      in
      larger volumes as opposed to deposits from within its market area. Because
      the
      brokered deposits are generated in large balances, they are easier to model
      and
      strategically analyze given interest rate fluctuations and such fluctuations’
impact on the Company’s net interest margin. Management will likely reduce its
      reliance on brokered funds as loan growth is expected to decrease and the
      Company turns its non-performing assets to cash.





*Liquidity
      and Capital Resources*





Net
      cash
      provided by operating activities totaled $7.3 million for the nine months ended
      September 30, 2007. Net cash used by investing activities totaled $42.4 million
      and consisted primarily of a $53.4 million increase in net loans to customers
      exclusive of acquired loans and an $11.9 million increase in securities
      available for sale. Net cash generated by financing activities was $55.2
      million, a result of an increase in total deposits of $51.7 million, proceeds
      from subordinated debt of $10.8 million and a net decrease in federal home
      loan
      bank advances of $5.0 million. The net increase in cash and cash equivalents
      as
      of September 30, 2007 was $20.2 million. The net cash paid to First Haralson
      shareholders net of cash received from its balance sheet was $517
      thousand.





Total
      stockholders’ equity at September 30, 2007 was 9.8 percent of total assets,
      compared to 9.1 percent at December 31, 2006. However, tangible equity to assets
      was 6.4 percent. Since December 31, 2006, the Company’s tangible capital has
      grown by $2.4 million, or 4.6 percent, while its total assets have grown by
      $285.6 million, or 49.6 percent. This resulted in a greater leverage to the
      balance sheet. The Company maintained a high level of excess capital in the
      past
      which ultimately reduces the return on equity to its shareholders. Directors
      and
      management of the Company, however, continually seek to maximize value to the
      shareholders through both appreciation of stock price and increased dividends.
      Cash dividends to the shareholders have increased by 15.1 percent comparing
      the
      three quarters ended September 30, 2007 with the same three quarters in 2006.





At
      September 30, 2007, WGNB Corp. was in compliance with various regulatory capital
      requirements administered by federal and state banking agencies. The following
      is a table representing WGNB Corp.’s consolidated Tier-1, tangible capital, and
      risk-based capital.





**September
                30, 2007****Actual**
              **Amount**
            ****
            **%**
            ****
            **Required**
              **Amount**
            ****
            **%**
            ****
            **Excess**
              **Amount**
            ****
            **%**Total
                capital (to risk-weighted
                assets)
            
            $
            73,208
            
            
            10.53
            %
            $
            55,604
            
            
            8.00
            %
            $
            17,604
            
            
            2.53
            %Tier
                1 capital (to risk-weighted
                assets)
            
            
            65,509
            
            
            9.43
            %
            
            27,802
            
            
            4.00
            %
            
            37,707
            
            
            5.43
            %Tier
                1 capital (to averageassets)
            
            
            65,509
            
            
            7.83
            %
            
            33,457
            
            
            4.00
            %
            
            32,052
            
            
            3.83
            %





*Off
      Balance Sheet Risks*





Through
      the operations of the Bank, the Company has made contractual commitments to
      extend credit in the ordinary course of its business activities. These
      commitments are legally binding agreements to lend money to the Bank’s customers
      at predetermined interest rates for a specified period of time. At September
      30,
      2007, the Bank had issued commitments to extend credit of $100.9 million through
      various types of commercial lending arrangements and additional commitments
      through standby letters of credit of $5.9 million. The Company evaluates each
      customer’s credit worthiness on a case-by-case basis. The amount of collateral
      obtained, if deemed necessary by the Company upon extension of credit, is based
      on its credit evaluation of the borrower. Collateral varies, but may include
      accounts receivable, inventory, property, plant and equipment, commercial and
      residential real estate. The Company manages the credit risk on these
      commitments by subjecting them to normal underwriting and risk management
      processes.


22





**Item
      3. Quantitative and Qualitative Disclosures about Market Risk**





Market
      risk is the risk of loss from adverse changes in market prices and interest
      rates. The Company’s market risk arises primarily from interest rate risk
      inherent in its lending and deposit-taking activities. The Company has little
      or
      no risk related to trading accounts, commodities and foreign
      exchanges.





Interest
      rate risk, which encompasses price risk, is the exposure of a banking
      organization’s financial condition and earnings ability to adverse movements in
      interest rates. The measurement of market risk associated with financial
      instruments is meaningful only when all related and offsetting on- and
      off-balance sheet transactions are aggregated, and resulting net positions
      are
      identified. Disclosures about the fair value of financial instruments as of
      December 31, 2006, which reflected changes in market prices and rates, can
      be
      found in the Company’s Annual Report to Stockholders on Form 10-K for the year
      ended December 31, 2006 under the section entitled “Management’s Discussion and
      Analysis of Financial Condition and Results of Operation - Asset/Liability
      Management.”





Management
      actively monitors and manages the Company’s interest rate risk exposure. The
      primary objective in managing interest rate risk is to limit, within established
      guidelines, the adverse impact of changes in interest rates on the Company’s net
      interest income and capital, while adjusting the Company’s asset-liability
      structure to control interest rate risk. However, a sudden and substantial
      increase in interest rates may not have proportional impact on interest
      sensitive assets and liabilities. Management believes that it has improved
      the
      Company’s position with regard to interest rate risk resulting from significant
      changes in market interest rates since December 31, 2006. See Note 4 to the
      consolidated financial statements included elsewhere in this
      Report.





**Item
      4. Controls and Procedures**





The
      Company maintains disclosure controls and procedures, as defined in Rule
      13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange
      Act”), that are designed to ensure that information required to be disclosed in
      the reports that the Company files or submits under the Exchange Act is
      recorded, processed, summarized and reported within the time periods specified
      in the rules and forms of the Securities and Exchange Commission and that such
      information is accumulated and communicated to the Company’s management,
      including its chief executive and chief financial officers, as appropriate,
      to
      allow timely decisions regarding required disclosure. The Company carried out
      an
      evaluation, under the supervision and with the participation of its management,
      including its chief executive and chief financial officers, of the effectiveness
      of the design and operation of its disclosure controls and procedures as of
      the
      end of the period covered by this Report. Based on the evaluation of these
      disclosure controls and procedures, the chief executive and chief financial
      officers of the Company concluded that the Company’s disclosure controls and
      procedures were effective as of the end of the period covered by this
      Report.





There
      were no changes in the Company’s internal control over financial reporting
      during the Company’s fiscal quarter ended September 30, 2007 that have
      materially affected, or are reasonably likely to materially affect, the
      Company’s internal control over financial reporting.





**Part
      II – Other
      Information**





**Item
      1.**  **Legal
      Proceedings**





There
      are
      no material, pending legal proceedings to which the Company or any of its
      subsidiaries is a party or of which any of their property is the subject.





**Item
      1A.**  **Risk
      Factors**





There
      have been no material changes to the risk factors affecting the Company from
      those set forth in the Company’s Annual Report on Form 10-K for the fiscal year
      ended December 31, 2006.





**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds**





(a)  Not
      applicable.





(b)  Not
      applicable.


(c) Not
        applicable.
 
 During
        the third quarter of 2007, the
        Company declared and paid quarterly cash dividends amounting to $0.21 per
        share.
        The declaration of future dividends is within the discretion of the Board
        of
        Directors and will depend, among other things, upon business conditions,
        earnings, the financial condition of the Bank and the Company, and regulatory
        requirements.




23





**Item
      3.**  **Defaults
      Upon Senior Securities**





Not
      applicable.





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders**





The
      Company held its 2007 Annual Meeting of Shareholders on September 11, 2007.
      The
      shareholders were asked to elect four Class I directors to serve on the
      Company’s Board of Directors until the 2010 Annual Meeting of Shareholders.





The
      shareholders were asked to elect Wanda W. Calhoun, L. Richard Plunkett, Donald
      C. Rhodes and Thomas T. Richards to serve as Class I directors on the Company’s
      Board of Directors, each for a three-year term. The following votes were cast
      for and against the election of these Class I directors: Ms. Calhoun: 4,893,274
      for / 375 opposed; Mr. Plunkett: 4,893,649 for / 0 opposed; Mr. Rhodes:
      4,893,649 for / 0 opposed; and Mr. Richards: 4,893,649 for / 0 opposed. There
      were no Broker non-votes or abstentions. The following persons also continue
      to
      serve as directors: W. T. Green, Jr., Randall F. Eaves, Loy M. Howard (recent
      appointee), R. David Perry and J. Thomas Vance (all Class II directors); and
      Grady W. Cole, H.B. “Rocky” Lipham, III, and Mary M. Covington (all Class III
      directors).





**Item
      5.**  **Other
      Information**





The
      Company’s 2008 Annual Meeting of Shareholders is currently expected to be held
      on May 13, 2008. Any shareholder satisfying the Securities and Exchange
      Commission’s eligibility requirements who wishes to submit a proposal to be
      included in the proxy statement for this annual meeting should do so in writing
      to the Corporate Secretary, 201 Maple Street, P.O. Box 280, Carrollton, Georgia
      30112. As a consequence of having advanced the date of the annual meeting by
      more than 30 days from the date the Company held its 2007 Annual Meeting of
      Shareholders, Securities and Exchange Commission rules provide that the new
      deadline for the Company’s receipt of shareholder proposals for inclusion in the
      proxy statement is a reasonable time before the Company begins to print and
      mail
      proxy materials for the annual meeting. The Company will regard any proposals
      that it receives on or before December 15, 2007 as having been timely received.
      This is also the date by which, under the Company’s Bylaws, a shareholder who
      wishes to bring business (including director nominations) before our 2008 annual
      meeting, would be required to provide written notice of such business (December
      15, 2007 being 150 days prior to the date of the contemplated 2008 annual
      meeting). For additional requirements, shareholders should refer to our Bylaws,
      article IV, section 1, a current copy of which may be obtained from our
      Corporate Secretary. If we do not receive timely notice pursuant to our Bylaws,
      any proposal may be excluded from consideration at the meeting, regardless
      of
      any notice provided in accordance with Rule 14a-8. The proxy solicited by the
      Board of Directors for the 2008 Annual Meeting of Shareholders will confer
      discretionary authority to vote as the proxy holders deem advisable on such
      shareholder proposals that are considered untimely.





**Item
      6.**  **Exhibits**





The
      following exhibits are filed as part of this Report:





3.1
            Amended
                and Restated Articles of Incorporation (Incorporated by reference
                to
                Exhibit 3.1 to the Company’s Registration Statement on Form 10-SB filed
                June 14, 2000 (the “Form 10-SB”)3.2
            Amended
                and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to
                the Form
                10-SB)4.1
            See
                exhibits 3.1 and 3.2 for provisions of Company’s Articles of Incorporation
                and Bylaws defining the rights of shareholders4.2
            Specimen
                certificate representing shares of Common Stock (Incorporated by
                reference
                to Exhibit 4.2 to the Form 10-SB)




4.3
            Rights
                Agreement dated as of February 12, 1997 between the Company and SunTrust
                Bank, Atlanta (Incorporated by reference to Exhibit 4.3 to the Form
                10-SB)4.4
            Amended
                and Restated Trust Agreement dated July 2, 2007 (Incorporated by
                reference
                to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 6,
                2007 (the “July 2007 Form 8-K”)


24


4.5
              Indenture,
                  dated July 2, 2007, by and between WGNB Corp. and Wilmington Trust
                  Company
                  (Incorporated by reference to Exhibit 4.2 to the July 2007 Form
                  8-K)
 4.6
              Guarantee
                  Agreement, dated July 2, 2007, by and between WGNB Corp. and Wilmington
                  Trust Company (Incorporated by reference to Exhibit 4.3 to the
                  July 2007
                  Form 8-K)
 10.1
              Employment
                  Agreement, dated July 1, 2007 among WGNB Corp. West Georgia National
                  Bank
                  and Randall F. Eaves (Incorporated by reference to Exhibit 10.1
                  to the
                  July 2007 Form 8-K)
 10.2
              Employment
                  Agreement, dated July 1, 2007 among WGNB Corp. West Georgia National
                  Bank
                  and Mary Covington (Incorporated by reference to Exhibit 10.2 to
                  the July
                  2007 Form 8-K)  31.1
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002  31.2
              Certification
                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes
                  Oxley
                  Act of 2002  32.1
              Certification
                  of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002  32.2
              Certification
                  of Chief Financial Officer pursuant to Section 906 of the Sarbanes
                  Oxley
                  Act of 2002
 25


**SIGNATURES**





In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      Company has caused this Report to be signed on its behalf by the undersigned,
      thereunto duly authorized.





Dated:
      November 13, 2007





**WGNB
                CORP.**By:
            /s/
                H.B. Lipham, IIIH.
                B. Lipham, IIIChief
                Executive OfficerBy:
            /s/
                Steven J. HaackSteven
                J. HaackTreasurerPrincipal
                Financial Officer


26